Can you have it, without having it? - Alex Klarman @ PSE 2013 Vilnius

Application of Theory of Constraints (TOC)

Can you have it, without having it?

A case-study of a Critical Chain application in a set of
huge city-wide construction and renovation projects

for the UEFA EURO 2012TM games in Wrocław,
Poland
Alex Klarman, Ph.D.
Łukasz Lorenz, M.Sc.
Artur Jóźwiak, M.Sc.
Goldratt Institute (Israel)

© 2013 Goldratt Institute (Israel)

This presentation contains material that is
the intellectual property of the
and may not be reproduced or distributed
in any form, in whole or in part, without
the prior written consent of
Dr. Alex Klarman and the
Goldratt Institute (Israel).

2


Alex Klarman, Ph.D.
Alex Klarman - As the CEO of the Goldratt Institute
(Israel), Dr. Klarman is leading the effort to introduce
TOC to, and establish it as the standard management
approach in Israel, as well as worldwide.
His background - Ph.D. in biophysics, as well as his
industrial and educational background, including long
years of hands-on experience in industry, makes him
exceptionally fitting to this demanding undertaking.
As the commanding officer of Dr. Eli Goldratt during
decades' long service the Israeli army, Dr. Klarman
became familiar with the early concepts of OPT and TOC
almost three decades ago. Since 1985 he took a major
part in the drive to develop, disseminate and apply TOC.
Dr. Klarman’s work included participating in developing
the Theory of Constraints and leading the development
of the educational materials and simulators used in
various areas of TOC education, as well as implementing
TOC solutions in some of the leading world-class
corporations including the likes of Ford, Phillips, Intel,
Teva and Microsoft, as well as many, many others.
3

Place for your photo

Question Mark Ltd.
2 Hadar Street
Herzliya 46290
ISRAEL
Tel: +972-9-950-7464
Fax: +972-9-950-7463
E-mail: toc-israel@012.net.il


What we did, and why it may be
:interesting
We’d like to present how and why a major city in
Poland, fearing possible delays in its preparations
to host the EURO 2012TM games has decided to apply
TOC in its project management.
Then, what it got in return.
4


The challenge:
After a most competitive process, involving first
many of the European countries, and then most
of the major Polish cities, in 2008 Wroclaw was
selected by UEFA to be one of the only four
Polish cities to host the games. The other three
were Warsaw, Poznan and Gdansk.

The town has immediately started a process of
design, planning and then constructing the
stadium and a host of other projects, in order to
enable the tens of thousands of expected visitors
to safely arrive and view the games.
5


The challenge:
It was also an once-in-a-lifetime opportunity to upgrade the
municipal infrastructure, and the City wasn’t going to miss it.
A bold architectural design was selected:

A contractor – a Polish-Greek consortium (having an experience at the
2004 Olympic Games at Athens) won the bid, promising to have it
ready by June 30, 2011. The construction work itself was to start in
April 2009 and to finish in January 2011.
6


What were the projects we are talking about?
The list of projects included:
 A 43,000 seats stadium of the Elite class.
 An integrated rail-tram-bus connector station
 A connection to the main European
superhighway A4 to Berlin and Ukraine
 An downtown ring-road
 The doubling of the main route leading to the
airport
 A new tram route connecting the stadium to the
city
 Roads, streets, bridges, and many walking and
cycling routes
 Etc…
7


So far so good – what was the problem?
On December 30, 2009, eight months after the
start of the construction works, the city had
revoked its contract with the contractor.

The reason, acc. to the press: “…large and
growing delays, which will certainly prevent
Wroclaw from hosting the games as planned”
.

8


So what the City of Wroclaw did?
Well, they did the smart thing, they have invited
us, Goldratt Institute (Israel)TM, to act as their
representative – to be their eyes, ears (and
mouth – when needed) - in assisting,
planning, monitoring and controlling the
entire multi-project environment.
We, in turn, have planned to apply the
Critical Chain Project Management
mechanisms in these projects.

9


cntd.


The first questions we’ve faced were very basic:
•

What exactly does the City expect of us?

•

What kind of project environment do we face
here? Is it a true Multi-Project environment, or
rather its a set of Multi-Single independent
projects?

10


cntd.


The answer to the first question was very clear:
•

11

To complete all projects according to plan.
Simple, isn’t it?


The answer to the second question was more tricky:

Are these Multi-project or multi-single?

The answer: Both!
Some of the projects turned out to be a part
of truly multi-project environment. In these
the CCPM multi-project methodology was
fully applied.
12


What type of projects were we dealing with?
Then, there was also another set of projects, which
were truly independent among themselves.
In these CCPM for single projects was applied.
Some other projects were, however, in such an advanced
state, that it was too late to fully introduce mechanisms of
planning and control acc. to CCPM. In these we made only
partial use of it, as well as other TOC tools.
And then there was the stadium.
13


So, we’ve divided all the projects into following groups:
The southern trio:
Lotnicza Rd.,
Connector rail-tram-bus station
Kosmonauts Rd.

proper CCPM, multiproject environment.

The northern duo:
Krolewiecka Rd
Kozanowska tram route

CCPM,
multi-single.

The singletons:
Strzegomska Street,
Mid-City ring-road,
the Cigar area

CCPM,
multi-single.

The Stadium
14


Kosmonautów
Station
Lotnicza

Cigar

The execution process:
We’ve decided to assist the project teams in the following way:





We’ve introduced a single-project CC Buffer
Management in the northern duo of projects.



17

Creating one interconnected functional super-project
out of the three separate projects of the southern trio. In
that way we’ve managed the project cluster as one, with
a single Project Buffer for the entire projects set.

We’ve introduced a single-project CC Buffer
Management in the single projects.


The execution process ctnd.:


However, we were barred (by the City, at the insistence
of the constructing company) from intervening in the
project management of the stadium, as this was a
project executed by the “one of the best stadiums
builder in Europe, maybe even in the world”, so our
assistance wasn’t thought to be needed.



18

All that was left for us there was to manage, mitigate
and resolve the multitude of collisions, conflicts and
other interactions between the stadium and the many
surrounding it projects.


The southern trio – CCPM, multi-project

Intercdependencies (potential
collisions) between Trio’s projects
19


The southern trio - execution

Lotnicza Rd.

Kosmonautow Rd.

Connector Rd.
20


The southern trio – fever chart
buffer
uffer
uffer

Connector

100%

Lotnicza
Trio
Kosmonautow

67%

33%

21

0

CC

100%

From the press:

The reconstructed Kosmonautow Rd. is ready before time
Przebudowana ulica Kosmonautów gotowa przed czasem
mag

24.08.2011 aktualizacja: 2011-08-24 17:06
According to the schedule, the work się tam be completed only
Zgodnie z harmonogramem prace powinny should zakończyć dopiero w in
październiku, tymczasemin this Saturday we’ll be able to drive through
October, but already nowym wiaduktem i poszerzonymi jezdniami będzie
można przejechać już od soboty.
the new overpass with its new double lanes.
Przebudowany fragment ulicy otwarty zostanie w nocy z piątku na sobotę i zacznie
obowiązywać docelowa organizacja ruchu. Tymczasowo zamknięte pozostaną
jedynie wjazdy na Autostradową Obwodnicę Wrocławia, bo z tej części nowej trasy
nie można jeszcze korzystać. Gdy otwarty zostanie fragment AOW od lotniska do
ul. Żmigrodzkiej, wjazdy na węźle Stadion też zostaną udostępnione.
Prawdopodobnie nastąpi to w ostatnich dniach sierpnia.
Zakończenie prac na ul. Kosmonautów oznacza, że można przywrócić ruch na
tamtejszym torowisku. Pasażerowie z Leśnicy wreszcie odetchną od przesiadek. Do
tamtejszej pętli kursować będą linie 10 i 20. Uruchomione zostaną jednak dopiero
w niedzielę 4 września. Do tego czasu z Leśnicy w kierunku centrum jeździć będzie
autobus zastępczy 710. Zastąpi tramwaje wahadłowe w najbliższą sobotę i dowozić
będzie pasażerów do Pilczyc, a tam będzie się już można przesiąść na tramwaje 3,
10, 20, 33plus oraz nową linię 32plus, która pojedzie do mostów Mieszczańskich.
Więcej... http://wroclaw.gazeta.pl/wroclaw/1,35751,10168402,Przebudowana_ulica_Kosmonautow_gotowa_przed_czasem.html#ixzz1VyZjXaJJ

22


The results at this stage:
1. The southern trio: Before or on time.
2. The northern duo: Before or on time.
3. The singletons: On time
4. The Stadium: Well, here is the story.

23


But before we get to the stadium, lets try to answer
the question posed at the title of our presentation.
So - Can you have it (CCPM) without having it?

YES!
How?

24

…Well, you have to apply some tricks.

Trick #1 – Look globally - Virtual Buffer
The latest
contractual
end-date

25


Explanation of Trick #1
Looking globally: Comparing the date when a project is actually required
vs when is it planned to complete, some projects turned out to have
available more time than it seemed.
Because what really was important for the City– to be ready on time for the
planned events. It has allowed us to:

1. To build project plans with ample Project Buffers.
2. Then, properly proritize among the members of the southern trio of
projects, as a true multi-project enviroment.
3. The single Project Buffers of its projects became Feeding Buffers of
the Critical Chain of the entire set.
4. In projects which were in an advanced stage of realization (the
singletons), it enabled creation of Project Buffers, even if their size was
lesser than desired.
26


Trick #2 – TOC added value – on top of CCPM

Lotnicza Rd. experience:
The main contractor here wasn’t too easy to cooperate with.
For some very good reasons...

Cable line 110kV

The
contractor’s
claim

Buffer

Our solution

27


Trick #2
We’ve applied TOC tools and convinced the main contractor to get
rid of time-reserves in the tasks (move to ABP times), thus enabling
the creation of the much needed buffers.
Surprisingly – he has agreed.
They got a new contractual finish-date, but on the basis of the spare
time revealed in the process, we have created the necessary buffer.

The result: the main road leading to the stadium was
completed one month before the first event there.

28


But what has happened at the Stadium project?
As we’ve mentioned before, we were practically
barred from the Stadium project.
For how long?

Until the situation there became critical, and the danger of
missing UEFA and City set milestones became very, very
real.

29


Wasn’t it too late to do anything?
Reconstruction of the Fever Chart of the Stadium

The moment
we’ve joined

30


Wasn’t it too late to do anything?

Although everybody else thought it’s a lost case,
we begged to differ - we didn’t think it’s too late.

Maybe it was too late to fully implement the
CCPM mechanism, but TOC has more to it than
just that.

31


What did we do, which TOC principles did we apply?
We’’ve turned to the three well known principles of
TOC:

I.

Inherent simplicity.

II. There are no conflicts in nature, which
can’t be solved…
III. People are not stupid.

32


How all this lead us to finish on time?
We’ve used all three principles, but it was the second and
the third that we’ve applied most; both the investor as
well as the contractor will win if the project is completed
on time – and they certainly are not stupid.

It was our main task to find, at every step, the common win.
Then we had to present it in such a way that doing the right
thing for the project was also the right (and worthwhile)
move for each of the parties.

33


What exactly we did?
1. As we know, applying the 5 steps of TOC starts with

identification of the constraint.
2. Only knowing what’s the constraint can lead to a

meaningful actions.
3. However, the constraint has moved several times during
our activity in the Stadium project.

34


What we did?
Stadium Constraints:




Once that was resolved, the constraint moved to the
lack of credible planning; no PERT or Gantt
whatsoever you can trust. So we assisted in building
one.



Then it moved to the financial problems of the
subcontractors. We tried to point out the most critical
subcontractors and then help resolve their problems.


35

At the beginning it was the lack of trust and reliable
communication along the Investor – Contractor
axis. We’ve helped to establish a system of
exchange of communication both sides could trust.

Etc…

What we did?

Successfully using the TOC tools of conflict resolution
(mainly the cloud and NBR) to resolve problems arising
between the various parties along the critical chain has
brought us within two weeks to position of trust and
authority.
From this point on, we were able to impact (or even
direct) the construction effort in a manner that has
prioritized any activity according to its impact on the
completion of the entire project on time.

36


Stadium - execution

37


Municipal Stadium - Wroclaw, Poland

38


The bottom line of the City
"W swoich działaniach Question Mark Ltd. wykorzystywała swoją "tajną broń"
do zarządzania projektami - metodę łańcucha krytycznego jako podstawę
procesów planowania, monitorowania i kontroli".
„In its activity Question Mark Ltd. has applied its „secret weapon" to

manage projects – the Critical Chain mthodology as the base for the
processes of planning, monitoring and controlling".

39


AR TURĖTUMĖTE KLAUSIMŲ?
Вопросы?

Questions?
AČIŪ
Большое спасибо!
Thank you!
Dziękujemy!

40


Dr Alex (Alik) Klarman –

only what truly matters:

Alex was born in Frunze (today it’s Bishkek) the capital of
Kyrgizstan – you sure know where it is.
He got his Ph.D. in biophysics (the molecular architecture of very
old and very large proteins) at the Biochemistry dept. of Tel-Aviv
University – raise your hand, if you want to know more.
As a major (reserve) in the Israeli Army he was Eli Goldratt’s
Commanding Officer in two wars – and both survived (how?).
His wife, Dr. Uki Maroshek (the intellectual part of the family)
manages the Adam Institute in Jerusalem – but Alex cooks. Well.
Has four sons - Dan, physicist (happens), Uri - computer science,
Shauli - finished his army service (+ some) and has just started
college, and Joav - the youngest, is now in the Army.
His previous book (together with Richard Klapholz), The Cash
Machine , on sales management acc. to TOC , was already
translated from English to Polish, Lithuanian (yes, that’s right!),
Chinese, Japanese and is soon to appear in German and Hebrew.

41

His latest book , also with Richard Klapholz, Release the
Hostages, regarding customer support systems acc. to TOC,
was published in 2009 in US.

Can you have it, without having it? - Alex Klarman @ PSE 2013 Vilnius

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (19)

More from commonsenseLT

More from commonsenseLT (15)

Recently uploaded

Recently uploaded (20)

Can you have it, without having it? - Alex Klarman @ PSE 2013 Vilnius